A man from Billingshurst has been jailed for seven years for a rare earth metals scam, according to police.
John Keith Dickinson, 33, of Billingshurst and James Anthony Oorloff, 31, of Ascot, were each found guilty of two counts of fraudulent trading at Guildford Crown Court on Monday, Surrey Police said.
Oorloff was also sentenced to four and a half years imprisonment, following the investigation by the Surrey and Sussex Economic Crime Unit, police said.
The specialist crime unit said the pair ran Acquire Assets Ltd before setting up Austin Leigh Ltd to carry on the same business, promoting themselves as wholesalers in commodities, ‘effectively creating a franchise’ for the scams.
Both companies provided a complete service to 11 different boiler room operations.
“White label” marketing packs were created to enable pressure selling of rare earth metals, before the company bought, imported and stored small quantities of the metals on behalf of the “investors”.
This allowed the two men to profit from boiler room selling, without directly speaking to victims.
Rare earth metals are used in advanced electronics such as smart phones, but the quantities bought by the victims were so small that there was no market for them.
The metals were bought at such vastly inflated prices that the victim had no hope of recovering their money.
A typical victim would spend £5500 on a “basket” of five different rare earth metals from the boiler room.
Acquire Assets paid the boiler room £3000 commission and spent £1269, 23 per cent of the sum, buying the metals.
The company paid out a flat fee of £95.80 to store the metals and a further £40.36 per year for insurance, leaving Acquire Assets with a profit of around £1094.68 (20 per cent).
By contrast, the investor would need an increase in value of 456 per cent over three years just to break even on the deal.
Surrey Police identified 164 investments across 11 boiler rooms in total.
Police found many of the victims were repeatedly targeted, as once they had bought one investment, the boiler rooms would target them for further investments.
Detective Sergeant Chris Rambour, of the Surrey and Sussex Economic Crime Unit, said: “These two provided everything the boiler rooms needed to run their scams, while keeping the victims at arm’s length.
“This was carried out over a period of time which allowed them to live a lavish lifestyle at the expense of the victims some who were vulnerable and who lost considerable sums of money.
“The sentences given reflect the gravity of their offending and are a satisfying conclusion to what was a very complex investigation carried out by Investigation Officer Alex Bray.”
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